Ukraine in squeeze between giants Russia and EU

Ukrainian students shout slogans during a protest to support European Union integration at Independence Square in Kyiv, Ukraine, Thursday. As leaders of the European Union gather for a summit to discuss the bloc's eastern expansion, both EU and Ukrainian officials said Thursday that the suspension of talks on closer ties could still be revived after the two-day meeting.

As Ukrainian President Viktor Yanukovich arrived at a European Union summit in Vilnius Thursday to say “thanks but no thanks” to a long-sought EU association pact, analysts were puzzling over what actually happened here.

And as European officials struggled to reverse his decision, the question that hangs most heavily is whether the thousands-strong protests in Ukrainian cities against Yanukovich’s EU rejection would explode into another Orange Revolution.

“This is about values, not politics,” says Ukraine expert Marta Dyczok of University of Western Ontario. “Ukrainians can either join a group that is not in great shape just now but has promise for the future, or be dragged back into the past. The protesters are saying ‘we’re Europeans.’”

Ukraine has for months endured severe pressure from its heavy-handed former master Moscow, which is trying to wrestle it into a curiously-assorted Customs Union with Russia, along with near-bankrupt Belarus and oil-rich Kazakhstan.

Kyiv was also struggling with EU demands to improve its dismal human rights record and release former Prime Minister Yulia Tymoshenko, who went on hunger strike in jail to protest Yanukovich’s decision not to sign on to the trade and political pact, a first step to EU membership.

Tymoshenko herself has said Ukraine should sign the EU pact with no preconditions.

As the summit approached, Kyiv had few expectations of short-term relief from the West. The International Monetary Fund had imposed tough terms on a prospective $15 billion loan to patch over a deep economic crisis, and the EU was wrestling with its own debt problems.

Then last week Yanukovich surprised the international community — and embarrassed European negotiators — by announcing a sudden rejection of an EU deal many Ukrainians hoped would usher in a new era of prosperity and freedom from Russia.

The EU is now Ukraine’s biggest trading partner, buying about $20 billion in goods a year.

But Yanukovich’s decision may not be so far off the mark, at least in the short term, says David Marples of University of Alberta.

“It’s not as though Europe was offering all that much,” he said. “It’s a deep and comprehensive trade agreement, but it might be 10 years before the effects are felt.”

However on Thursday European officials hinted that cash might flow if Yanukovich were open to a change of plan. An EU special envoy told reporters it is “ready to talk seriously about economic aid to Ukraine.”

German Chancellor Angela Merkel, who holds the most substantial purse strings, said that although the deal will not succeed during this meeting, “the door is open. We will make very clear that the EU is ready to take in Ukraine as an associated member.”

However Russia, which buys about $17 billion in Ukrainian goods a year, has a virtual monopoly on the energy flow to Kiev, and warned that moving closer to Europe could be “suicidal,” threatening to choke off natural gas supplies and escalate trade sanctions that could cripple Ukraine’s fragile economy.

Protesters who turn out daily in freezing weather in Kyiv and other cities see the up-side of the EU deal, regardless. The protests have prompted comparisons with Ukraine’s 2004 Orange Revolution, which forced Yanukovich out of power after allegations of election fraud.

“The people in the Maidan (Kyiv’s main square) are saying they’re tired of Ukraine’s political culture,” says Dyczok. “They’ve been brutalized by the police, abused by the system, and the people in power have been stealing from them. They believe that the EU is their only option to put on the brakes.”

But says Marples, a recent poll suggests that opinion in Ukraine is divided along a number of fault lines. “It suggests support for the EU and the Customs Union are about equal, with the younger people more likely to support the EU, and the older ones more committed to Russia and the union.”

The poll, by the Kyiv International Institute of Sociology this month, shows that about 41 per cent of responders favoured the Customs Union, and 33 per cent opposed it. But about 40 per cent also said they would vote for joining the EU, with 35 per cent against it. Apart from the young, those in western and central Ukraine largely supported the EU.

The figures could give Yanukovich, whose popularity is waning, less anxiety about the voices in the streets. “Everything that Yanukovich does is guided by the presidential election in March 2015,” says the Economist, pointing out that turning away from Brussels and toward Moscow could also backfire.

Even an injection of Russian cash would not solve Ukraine’s serious economic problems, it said. “Economically and politically things are likely to get worse not better. But now, this will be blamed on Russia and Yanukovich.”